City of Fools

continued  Ah, what (fools? knaves?) these mortals be! You supply the word.

The city is being sued over the pension debacle. In a deposition, attorney Mike Conger, representing the plaintiffs, asks the city treasurer about the misleading statements in the prospectuses. She didn't read them, she tells Conger.

After the January 27 filing, the city decides to issue bonds, supposedly amending the prospectuses to atone for the post-1996 sins. But in the new prospectuses, the city blames much of its difficulties on subpar investment returns during 1997-2003. But the pension system claims its returns have been almost as high as the 8 percent required by actuaries.

Actually, the city has been skimming capital gains from the pension fund for years and using the money to make its own fund contributions, says Shipione. Maybe that's why it blames market underperformance for its woes. "It's very cunning" in its statements, she says. It's knavery.

So politicians are saying the city can plug the hole by selling assets. Should we sell the Zoo and Wild Animal Park to Disneyland? Or sell the San Vicente Reservoir to the water-deficient Barona Indian casino? Don't laugh. Some suggest putting city-owned assets in the pension fund. It would be a Band-Aid. Sums up Michael Aguirre, by far the largest vote-getter in the run for city attorney: "The state constitution prohibits underfunding, the city charter prohibits underfunding, and a court case says it's unconstitutional to underfund. But the city attorney said it was legally okay. He was more knave than fool. The city had an ulterior motive: rob Peter's pension plan to pay Paul's corporate sports programs."